Major changes are coming to Social Security in 2025. Is your retirement plan ready? We break down the new Full Retirement Age, earnings limits, and what they mean for your money. #SocialSecurity2025 #RetirementPlanning #USNews
00:00Social Security shakes up 2025. Your retirement, your money. In 2025, Social Security continues its role as a bedrock for millions of Americans, with the average monthly benefit now topping $2,000 for the first time.
00:15That's around $24,000 a year for the typical senior. But the rules of the game are changing, and understanding these new regulations is critical for anyone planning their financial future.
00:26For those born in 1959, a significant change is underway. Your full retirement age, or FRA, has increased by 2 months to 66 years and 10 months.
00:37This is the age you must reach to receive your full base monthly benefit. Claiming benefits before this age will permanently reduce your checks.
00:45For instance, claiming at age 62 will slash your benefit by nearly 30%. On the other hand, delaying benefits past your FRA the way to age 70 can boost your monthly payment by 8% for each year you wait.
00:59For someone with an FRA of 67, waiting until age 70 can increase your benefit by 24%.
01:06Another key change impacts higher earners. The taxable wage-based limit has increased to $176,100, up from $168,600.
01:17This means that a larger portion of income for some higher-earning individuals is now subject to Social Security payroll taxes.
01:24While this may mean a bigger tax bill today, it also contributes to a larger retirement benefit down the line.
01:30Finally, for those who are still working while receiving benefits, the retirement earnings test has new limits.
01:36If you won't reach your FRA in 2025, the limit is now $23,400. Earn more than that, and your benefits will be reduced by $1 for every $2 you go over.
01:47If you will reach your FRA this year, the limit is $62,160, with a $1 reduction for every $3 earned above the limit.
01:56The good news is, these withheld benefits are not lost forever. They're added back to your checks after you reach your full retirement age.
02:03With these changes, the strategies you employ to maximize your benefits become even more important.
02:10Working for at least 35 years is crucial, as your benefit is calculated based on your 35 highest earning years.
02:17Maximizing your income today can lead to higher benefits tomorrow, and choosing the right claiming age, whether it's at your FRA or a bit later,
02:24is a decision that could significantly impact your financial well-being for decades to come.
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